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Bluerock Capital Markets Attracts Record $365 Million of New Equity Inflows in February

Bluerock Capital Markets Attracts Record $365 Million of New Equity Inflows in February
PR Newswire
NEW YORK, March 7, 2022

NEW YORK, March 7, 2022 /PRNewswire/ — Bluerock Capital Markets, LLC (“BCM” or “Company”), a distributor of institutional a…

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Bluerock Capital Markets Attracts Record $365 Million of New Equity Inflows in February

PR Newswire

NEW YORK, March 7, 2022

NEW YORK, March 7, 2022 /PRNewswire/ -- Bluerock Capital Markets, LLC ("BCM" or "Company"), a distributor of institutional alternative investment products and the dedicated dealer manager for Bluerock, reported a new monthly record of equity capital inflows with approximately $365 million in February.  The Company's trailing equity inflows annualize to over $4.3 billion.

The record-setting pace was led by Bluerock's flagship institutional real estate fund, Bluerock Total Income+ Real Estate Fund (the "Fund or "Bluerock TI" Fund"), with nearly $336 million in new equity in February; up 21% from the prior record set in January1.  The Fund has accumulated the highest capital inflows from the beginning of the COVID pandemic (April 2020) through January 2022 (most recent data) among all active interval funds within the direct investment industry.2

Further, the Bluerock TI+ Fund has paid 36 consecutive quarterly distributions over its 9+ year history at a steady 5.25% annualized rate providing $13.40 per share of cash flow with an average 63% of its distributions being tax-deferred since inception3 (TIPRX, A-share, 10.22.2012) and has generated a 9.06% annualized return since inception, a 5.51% YTD return and a 25.57% trailing one-year return with a very low 1.8% annualized standard deviation since inception (TIPRX, A-share), all as of February 28, 2022.  The annualized return results in more than 380 basis points of annual appreciation over and above the annual 5.25% distribution rate thereby providing shareholders with a hard to come by combination of attractive tax-efficient income and high appreciation with very low volatility.

Bluerock TI+ Fund has also been a consistent leader in risk-adjusted performance generating the single highest Sharpe and Sortino Ratios (key measures of risk-adjusted returns) of all domestic '40 Act funds (including equities, fixed income and specialty sector) in the trailing 5-year (7,894 funds) and since inception (6,153 funds) time periods as of 2.28.22, per Morningstar4. The Fund's peer-leading performance spans multiple time periods with the Fund's A-share and I-shares both reporting the highest total net returns in the trailing 5-year period among all active real estate sector interval funds (7 funds) as of 2.28.2022.5  The Fund has delivered positive total returns to its shareholders every year since inception (9+ years) and 33 of 36 quarters. Past performance is no guarantee of future results.

"Bluerock TI+ Real Estate Fund's exemplary recent and long-term performance continues to provide a rare combination of substantial tax-efficient income and growth with low volatility to our financial advisors and their clients at a time of high anxiety over inflation, rising rate concerns and valuation declines across the major equity and fixed income indices YTD," said Jeffrey S. Schwaber, CEO of Bluerock Capital Markets.  "In that regard, after delivering a 21.61% return in 2021, Bluerock TI+ Fund (TIPRX, no load) has generated a positive 5.51% return for the first two months of 2022 versus a -8.01% for the S&P 500, -3.25% for the Bloomberg U.S. Aggregate Bond Index, and -12.01% for the NASDAQ Composite providing our investors with a portfolio enhancing 8.80% - 17.60% outperformance compared to these major indices. Further, we maintain our bullish outlook for institutional private equity real estate and in particular, Bluerock's high conviction and overweight sectors," added Schwaber.      

In addition, the Company also reported strong monthly equity inflows for 1031 exchange/DST programs through Bluerock Value Exchange (BVEX) with approximately $29 million in February.  BVEX continues to rank within the top 10 in total annualized equity raise among all 1031/DST sponsors within the direct investment industry over the past 15+ years.2  

*Returns would have been lower if the calculation reflected the load.
1 Includes distribution reinvestment. 
2 Source: R.A. Stanger, Market Pulse as of January 2022; exclusively RIA/independent broker dealer intermediary distribution.
3 The Fund's distribution policy is to make quarterly distributions to shareholders. The level of quarterly distributions (including any return of capital) is not fixed. However, this distribution policy is subject to change. The Fund's distribution amounts were calculated based on the ordinary income received from the underlying investments, including short-term capital gains realized from the disposition of such investments. Shareholders should not assume that the source of a distribution from the Fund is net profit. All or a portion of the distributions consist of a return of capital based on the character of the distributions received from the underlying holdings, primarily Real Estate Investment Trusts. The final determination of the source and tax characteristics of all distributions will be made after the end of the year. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares. There is no assurance that the Company will continue to declare distributions or that they will continue at these rates. Distributions historically 63% tax deferred from 1.1.2013-12.31.2021.
4 Source: Morningstar Direct based on daily data as of 2.28.2022, among of all U.S. open-end, closed-end, and exchange traded funds (7,894 funds in the trailing 5-year period, and 6,153 funds since inception) TIPRX generated the highest annualized Sharpe Ratio and annualized Sortino Ratio; compiled by Bluerock Fund Advisor, LLC. TIPRX, no load. Sharpe Ratio, and Sortino Ratio are only two forms of performance measure. The Sharpe Ratio and Sortino Ratio would have been lower if the calculation reflected the load.  The funds considered in the analysis have significant differences, including various objectives, strategies, liquidity, and fees (see definitions below).
5 Source: Morningstar Direct, trailing 5 years through 2.28.2022, all real estate interval funds as identified by intervalfundtracker.com.  The 5-year comparison includes 7 funds. Past performance does not guarantee future results.

TI+ Fund Class A and I Share Net Performance


Performance through
2.28.22

Performance through 12.31.2021

One Year

One Year

Three Year

Five Year

Annualized Since Inception6

TI+ Fund Class A

25.57%

21.61%

9.80%

8.65%

8.59%

TI+ Class A with Max Sales Charge7

18.36%

14.64%

7.65%

7.37%

7.89%

TI+ Fund Class I

25.92%

21.91%

10.07%

8.91%

8.41%

Returns presented are total net return: expressed in percentage terms, the calculation of total return is determined by taking the change in price, reinvesting, if applicable, all income and capital gains distributions during the period, and dividing by the starting price. Returns greater than one year are annualized.

6 Inception date of the TI+ Fund Class A share is October 22, 2012 and Class I share is April 1, 2014.
7 The maximum sales charge for the Class A shares is 5.75%. Investors may be eligible for a waiver or a reduction in the sales charge.

The performance data quoted here represents past performance. Current performance may be lower or higher than the performance data quoted above. Investment return and principal value will fluctuate, so that shares, when redeemed, may be worth more or less than their original cost. For performance information current to the most recent month end, please call toll-free 1-888-459-1059.  Past performance is no guarantee of future results. 

The total annual fund operating expense ratio, gross of any fee waivers or expense reimbursements, is 2.09% for Class A and 1.83% for Class I. The Fund's investment advisor has contractually agreed to reduce its fees and/or absorb expenses of the fund, at least until January 31, 2023 for Class A, and I-shares, to ensure that the net annual fund operating expenses will not exceed 1.95% for Class A, and 1.70% for Class I per annum of the Fund's average daily net assets attributable to Class A, and Class I, respectively, subject to possible recoupment from the Fund in future years. Please review the Fund's Prospectus for more detail on the expense waiver. A fund's performance, especially for very short periods of time, should not be the sole factor in making your investment decisions. Fund performance and distributions are presented net of fees. 

About Bluerock
Bluerock is a leading institutional alternative asset manager with more than $12 billion of acquired and managed assets headquartered in Manhattan with regional offices across the U.S. Bluerock principals have a collective 100+ years of investing experience with more than $48 billion real estate and capital markets experience and have helped launch leading private and public company platforms.

About Bluerock Total Income+ Real Estate Fund
The Bluerock Total Income+ Real Estate Fund offers individual investors access to a portfolio of institutional real estate securities managed by top-ranked fund managers. The Fund seeks to provide a comprehensive real estate holding designed to provide a combination of current income, capital preservation, long-term capital appreciation and enhanced portfolio diversification with low to moderate volatility and low correlation to the broader equity and fixed income markets. The Fund utilizes an exclusive partnership with Mercer Investment Management, Inc., the world's leading advisor to endowments, pension funds, sovereign wealth funds and family offices globally, with over 3,300 clients worldwide, and over $15.5 trillion in assets under advisement.

About Bluerock Value Exchange
Bluerock Value Exchange is a national sponsor of syndicated 1031-exchange offerings with a focus on Premier Exchange Properties™ that seek to deliver stable cash flows and potential for value creation. Bluerock has structured 1031 exchanges on approximately $2 billion in total property value and 11 million square feet of property.

Bluerock Value Exchange's programs are offered by Bluerock Capital Markets, LLC.

Disclosures

The Bluerock Total Income+ Real Estate Fund is a closed-end interval fund that invests the majority of its assets in institutional private equity real estate securities that are generally available only to institutional investors capable of meeting the multi-million dollar minimum investment criteria. As of Q4 2021, the value of the underlying real estate held by the securities in which the Fund is invested is approximately $292 billion, including investments managed by Ares, Blackstone, Morgan Stanley, Principal, Prudential, Clarion Partners, Invesco and RREEF, among others. The minimum investment in the Fund is $2,500 ($1,000 for retirement plans) for Class A, C, and L shares. 

For copies of TI+ public company filings, please visit the U.S. Securities and Exchange Commission's website at www.sec.gov or the Company's website at www.bluerockfunds.com.

Investing in the Bluerock Total Income+ Real Estate Fund involves risks, including the loss of principal. The Fund intends to make investments in multiple real estate securities that may subject the Fund to additional fees and expenses, including management and performance fees, which could negatively affect returns and could expose the Fund to additional risk, including lack of control, as further described in the prospectus.

The ability of the Fund to achieve its investment objective depends, in part, on the ability of the Advisor to allocate effectively the Fund's assets across the various asset classes in which it invests and to select investments in each such asset class. There can be no assurance that the actual allocations will be effective in achieving the Fund's investment objective or delivering positive returns.

The current novel coronavirus (COVID-19) global pandemic and the aggressive responses taken by many governments, including closing borders, restricting international and domestic travel, and the imposition of prolonged quarantines or similar restrictions, as well as the forced or voluntary closure of, or operational changes to, many retail and other businesses, have had negative impacts, and in many cases severe negative impacts, on markets worldwide. Potential impacts on the real estate market may include lower occupancy rates, decreased lease payments, defaults and foreclosures, among other consequences. It is not known how long such impacts, or any future impacts of other significant events described above, will or would last, but there could be a prolonged period of global economic slowdown.

The Fund will concentrate its investments in real estate industry securities. The value of the Fund's shares will be affected by factors affecting the value of real estate and the earnings of companies engaged in the real estate industry. Many real estate companies utilize leverage, which increases investment risk and could adversely affect a company's operations and market value in periods of rising interest rates. The value of securities of companies in the real estate industry may go through cycles of relative under-performance and over-performance in comparison to equity securities markets in general.

A significant portion of the Fund's underlying investments are in private real estate investment funds managed by institutional investment managers ("Institutional Investment Funds"). Investments in Institutional Investment Funds pose additional risks.

Additional risks related to an investment in the Fund are set forth in the "Risk Factors" section of the prospectus, which include, but are not limited to the following: convertible securities risk; correlation risk; credit risk; fixed income risk; leverage risk; risk of competition between underlying funds; and preferred securities risk.

Investors should carefully consider the investment objectives, risks, charges and expenses of the Bluerock Total Income+ Real Estate Fund. This and other important information about the Fund is contained in the prospectus, which can be obtained online at bluerockfunds.com. The prospectus should be read carefully before investing.

Definitions

A basis point is a measurement with one basis point equal to 1/100th of 1%.

An open-end fund is a type of mutual fund that does not have restrictions on the amount of shares the fund can issue. The majority of mutual funds are open-end, providing investors with a useful and convenient investing vehicle. Shares are bought and sold on demand at their net asset value (NAV), which is based on the value of the fund's underlying securities and is calculated at the end of the trading day.

A closed-end fund is organized as a publicly traded investment company by the Securities and Exchange Commission (SEC). Like a mutual fund, a closed-end fund is a pooled investment fund with a manager overseeing the portfolio; it raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange. Unlike open-end funds, closed-end funds trade just like stocks. While open-end funds are priced only once at the end of the day, closed-end funds are traded and priced throughout the day.

An ETF, or exchange-traded fund, is a marketable security that tracks a stock index, a commodity, bonds, or a basket of assets. Although similar in many ways, ETFs differ from mutual funds because shares trade like common stock on an exchange. The price of an ETF's shares will change throughout the day as they are bought and sold.

Sharpe Ratio: Measurement of the risk-adjusted performance calculated by subtracting the annualized risk-free rate (3-month Treasury Bill) from the annualized rate of return for a portfolio and dividing the result by the annualized standard deviation of the portfolio returns.

Sortino Ratio: Measurement of risk-adjusted performance and a modification of the Sharpe ratio to measure the return to "bad" volatility (i.e., volatility caused by negative returns considered bad or undesirable by an investor), calculated as the excess return over the risk-free rate divided by the downside semi-variance.

Annual standard deviation is the daily percentage change  in  an  investment.  Standard deviation shows  how  much variation from the average exists with a larger number indicating the data points are more spread out over a larger range of values.

Stocks (S&P 500): An index of 500 stocks chosen for market size, liquidity and industry grouping, among other factors. The S&P 500 is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large cap universe (Investopedia). Risks include the dynamic fluctuations of the market and possible loss of principal.

Bonds (The Bloomberg U.S. Aggregate Bond Index): measures the performance of the U.S. investment grade bond market. The index invests in a wide spectrum of public, investment-grade, taxable, fixed income securities in the United States – including government, corporate, and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities, all with maturities of more than 1 year. Risks include rising interest rates, credit quality of the issuers and general economic conditions.

NASDAQ Composite: an index of more than 3,000 common equities listed on the NASDAQ stock market. The index is one of the most followed indices in the United States, alongside the Dow Jones Industrial Average and the S&P 500. The majority of companies listed on the NASDAQ Composite are technology companies.

The Bluerock Total Income+ Real Estate Fund is distributed by ALPS Distributors Inc. Bluerock Capital Markets, LLC is not affiliated with ALPS Distributors, Inc. or Mercer Investment Management, Inc. ALPS Distributors, Inc. is not affiliated with Bluerock Residential Growth REIT.

 

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These Cities Have The Highest (And Lowest) Share Of Unaffordable Neighborhoods In 2024

These Cities Have The Highest (And Lowest) Share Of Unaffordable Neighborhoods In 2024

Authored by Sam Bourgi via CreditNews.com,

Homeownership…

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March 14, 2024

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These Cities Have The Highest (And Lowest) Share Of Unaffordable Neighborhoods In 2024

Authored by Sam Bourgi via CreditNews.com,

Homeownership is one of the key pillars of the American dream. But for many families, the idyllic fantasy of a picket fence and backyard barbecues remains just that—a fantasy.

Thanks to elevated mortgage rates, sky-high house prices, and scarce inventory, millions of American families have been locked out of the opportunity to buy a home in many cities.

To shed light on America’s housing affordability crisis, Creditnews Research ranked the 50 most populous cities by the percentage of neighborhoods within reach for the typical married-couple household to buy a home in.

The study reveals a stark reality, with many cities completely out of reach for the most affluent household type. Not only that, the unaffordability has radically worsened in recent years.

Comparing how affordability has changed since Covid, Creditnews Research discovered an alarming pattern—indicating consistently more unaffordable housing in all but three cities.

Fortunately, there’s still hope for households seeking to put down roots in more affordable cities—especially for those looking beyond Los Angeles, New York, Boston, San Jone, and Miami.

The typical American family has a hard time putting down roots in many parts of the country. In 11 of the top 50 cities, at least 50% of neighborhoods are out of reach for the average married-couple household. The affordability gap has widened significantly since Covid; in fact, no major city has reported an improvement in affordability post-pandemic.

Sam Bourgi, Senior Analyst at Creditnews

Key findings

  • The most unaffordable cities are Los Angeles, Boston, St. Louis, and San Jose; in each city, 100% of neighborhoods are out of reach for for married-couple households earning a median income;

  • The most affordable cities are Cleveland, Hartford, and Memphis—in these cities, the typical family can afford all neighborhoods;

  • None of the top 50 cities by population saw an improvement in affordable neighborhoods post-pandemic;

  • California recorded the biggest spike in unaffordable neighborhoods since pre-Covid;

  • The share of unaffordable neighborhoods has increased the most since pre-Covid in San Jose (70 percentage points), San Diego (from 57.8 percentage points), and Riverside-San Bernardino (51.9 percentage points);

  • Only three cities have seen no change in housing affordability since pre-Covid: Cleveland, Memphis, and Hartford. They’re also the only cities that had 0% of unaffordable neighborhoods before Covid.

Cities with the highest share of unaffordable neighborhoods

With few exceptions, the most unaffordable cities for married-couple households tend to be located in some of the nation’s most expensive housing markets.

Four cities in the ranking have an unaffordability percentage of 100%—indicating that the median married-couple household couldn’t qualify for an average home in any neighborhood.

The following are the cities ranked from the least affordable to the most:

  • Los Angeles, CA: Housing affordability in Los Angeles has deteriorated over the last five years, as average incomes have failed to keep pace with rising property values and elevated mortgage rates. The median household income of married-couple families in LA is $117,056, but even at that rate, 100% of the city’s neighborhoods are unaffordable.

  • St. Louis, MO: It may be surprising to see St. Louis ranking among the most unaffordable housing markets for married-couple households. But a closer look reveals that the Mound City was unaffordable even before Covid. In 2019, 98% of the city’s neighborhoods were unaffordable—way worse than Los Angeles, Boston, or San Jose.

  • Boston, MA: Boston’s housing affordability challenges began long before Covid but accelerated after the pandemic. Before Covid, married couples earning a median income were priced out of 90.7% of Boston’s neighborhoods. But that figure has since jumped to 100%, despite a comfortable median household income of $172,223.

  • San Jose, CA: Nestled in Silicon Valley, San Jose has long been one of the most expensive cities for housing in America. But things have gotten far worse since Covid, as 100% of its neighborhoods are now out of reach for the average family. Perhaps the most shocking part is that the median household income for married-couple families is $188,403—much higher than the national average.

  • San Diego, CA: Another California city, San Diego, is among the most unaffordable places in the country. Despite boasting a median married-couple household income of $136,297, 95.6% of the city’s neighborhoods are unaffordable.

  • San Francisco, CA: San Francisco is another California city with a high married-couple median income ($211,585) but low affordability. The percentage of unaffordable neighborhoods for these homebuyers stands at 89.2%.

  • New York, NY: As one of the most expensive cities in America, New York is a difficult housing market for married couples with dual income. New York City’s share of unaffordable neighborhoods is 85.9%, marking a 33.4% rise from pre-Covid times.

  • Miami, FL: Partly due to a population boom post-Covid, Miami is now one of the most unaffordable cities for homebuyers. Roughly four out of five (79.4%) of Miami’s neighborhoods are out of reach price-wise for married-couple families. That’s a 34.7% increase from 2019.

  • Nashville, TN: With Nashville’s population growth rebounding to pre-pandemic levels, the city has also seen greater affordability challenges. In the Music City, 73.7% of neighborhoods are considered unaffordable for married-couple households—an increase of 11.9% from pre-Covid levels.

  • Richmond, VA: Rounding out the bottom 10 is Richmond, where 55.9% of the city’s 161 neighborhoods are unaffordable for married-couple households. That’s an 11.9% increase from pre-Covid levels.

Cities with the lowest share of unaffordable neighborhoods

All the cities in our top-10 ranking have less than 10% unaffordable neighborhoods—meaning the average family can qualify for a home in at least 90% of the city.

Interestingly, these cities are also outside the top 15 cities by population, and eight are in the bottom half.

The following are the cities ranked from the most affordable to the least:

  • Hartford, CT: Hartford ranks first with the percentage of unaffordable neighborhoods at 0%, unchanged since pre-Covid times. Married couples earning a median income of $135,612 can afford to live in any of the city’s 16 neighborhoods. Interestingly, Hartford is the smallest city to rank in the top 10.

  • Memphis, TN: Like Hartford, Memphis has 0% unaffordable neighborhoods, meaning any married couple earning a median income of $101,734 can afford an average homes in any of the city’s 12 neighborhoods. The percentage of unaffordable neighborhoods also stood at 0% before Covid.

  • Cleveland, OH: The Midwestern city of Cleveland is also tied for first, with the percentage of unaffordable neighborhoods at 0%. That means households with a median-couple income of $89,066 can qualify for an average home in all of the city’s neighborhoods. Cleveland is also among the three cities that have seen no change in unaffordability compared to 2019.

  • Minneapolis, MN: The largest city in the top 10, Minneapolis’ share of unaffordable neighborhoods stood at 2.41%, up slightly from 2019. Married couples earning the median income ($149,214) have access to the vast majority of the city’s 83 neighborhoods.

  • Baltimore, MD: Married-couple households in Baltimore earn a median income of $141,634. At that rate, they can afford to live in 97.3% of the city’s 222 neighborhoods, making only 2.7% of neighborhoods unaffordable. That’s up from 0% pre-Covid.

  • Louisville, KY: Louisville is a highly competitive market for married households. For married-couple households earning a median wage, only 3.6% of neighborhoods are unaffordable, up 11.9% from pre-Covid times.

  • Cincinnati, OH: The second Ohio city in the top 10 ranks close to Cleveland in population but has a much higher median married-couple household income of $129,324. Only 3.6% of the city’s neighborhoods are unaffordable, up slightly from pre-pandemic levels.

  • Indianapolis, IN: Another competitive Midwestern market, only 4.4% of Indianapolis is unaffordable, making the vast majority of the city’s 92 neighborhoods accessible to the average married couple. Still, the percentage of unaffordable neighborhoods before Covid was less than 1%.

  • Oklahoma City, OK: Before Covid, Oklahoma City had 0% neighborhoods unaffordable for married-couple households earning the median wage. It has since increased to 4.69%, which is still tiny compared to the national average.

  • Kansas City, MO: Kansas City has one of the largest numbers of neighborhoods in the top 50 cities. Its married-couple residents can afford to live in nearly 95% of them, making only 5.6% of neighborhoods out of reach. Like Indiana, Kansas City’s share of unaffordable neighborhoods was less than 1% before Covid.

The biggest COVID losers

What's particularly astonishing about the current housing market is just how quickly affordability has declined since Covid.

Even factoring in the market correction after the 2022 peak, the price of existing homes is still nearly one-third higher than before Covid. Mortgage rates have also more than doubled since early 2022.

Combined, the rising home prices and interest rates led to the worst mortgage affordability in more than 40 years.

Against this backdrop, it’s hardly surprising that unaffordability increased in 47 of the 50 cities studied and remained flat in the other three. No city reported improved affordability in 2024 compared to 2019.

The biggest increases are led by San Jose (70 percentage points), San Diego (57.8 percentage points), Riverside-San Bernardino (51.9 percentage points), Sacramento (43 percentage points), Orlando (37.4 percentage points), Miami (34.7 percentage points), and New York City (33.4 percentage points).

The following cities in our study are ranked by the largest percentage point change in unaffordable neighborhoods since pre-Covid:

Tyler Durden Thu, 03/14/2024 - 14:00

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Your financial plan may be riskier without bitcoin

It might actually be riskier to not have bitcoin in your portfolio than it is to have a small allocation.

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March 14, 2024

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This article originally appeared in the Sound Advisory blog. Sound Advisory provide financial advisory services and are specialize in educating and guiding clients to thrive financially in a bitcoin-powered world. Click here to learn more.

“Belief is a wise wager. Granted that faith cannot be proved, what harm will come to you if you gamble on its truth and it proves false? If you gain, you gain all; if you lose, you lose nothing. Wager, then, without hesitation, that He exists.”

- Blaise Pascal

Blaise Pascal only lived to age 39 but became world-famous for many contributions in the fields of mathematics, physics, and theology. The above quote encapsulates Pascal’s wager—a philosophical argument for the Christian belief in the existence of God.

The argument's conclusion states that a rational person should live as though God exists. Even if the probability is low, the reward is worth the risk.

Pascal’s wager as a justification for bitcoin? Yes, I’m aware of the fallacies: false dichotomy, appeal to emotion, begging the question, etc. That is not the point. The point is that binary outcomes instigate extreme results, and the game theory of money suggests that it’s a winner-take-all game.

The Pascalian investor: A rational approach to bitcoin

Humanity’s adoption of “the best money over time” mimics a series of binary outcomes—A/B tests.

Throughout history, inferior forms of money have faded as better alternatives emerged (see India’s failed transition to a gold standard). And if bitcoin is trying to be the premier money of the future, it will either succeed or it won’t.

“If you ain’t first, you’re last.” -Ricky Bobby, Talladega Nights, on which monies succeed over time.

So, we can look at bitcoin success similarly to Pascal’s wager—let’s call it Satoshi’s wager. The translated points would go something like this:

  • If you own bitcoin early and it becomes a globally valuable money, you gain immensely. ????
  • If you own bitcoin and it fails, you’ve lost that value. ????
  • If you don’t own bitcoin and it goes to zero, no pain and no gain. ????
  • If you don’t own bitcoin and it succeeds, you will have missed out on the significant financial revolution of our lifetimes and fall comparatively behind. ????

If bitcoin is successful, it will be worth far more than it is today and have a massive impact on your financial future. If it fails, the losses are only limited to your exposure. The most that you could lose is the money that you invested.

It is hypothetically possible that bitcoin could be worth 100x more than it is today, but it can only possibly lose 1x its value as it goes to zero. The concept we’re discussing here is asymmetric upside - significant gains with relatively limited downside. In other words, the potential rewards of the investment outweigh the potential risks.

Bitcoin offers an asymmetric upside that makes it a wise investment for most portfolios. Even a small allocation provides potential protection against extreme currency debasement.

Salt, gasoline, and insurance

“Don’t over salt your steak, pour too much gas on the fire, or buy too much insurance.”

A little bit goes a long way, and you can easily overdo it. The same applies when looking at bitcoin in the context of a financial plan.

Bitcoin’s asymmetric upside gives it “insurance-like” qualities, and that insurance pays off very well in times of money printing. This was exemplified in 2020 when bitcoin's value increased over 300% in response to pandemic money printing, far outpacing stocks, gold, and bonds.

Bitcoin offers a similar asymmetric upside today. Bitcoin's supply is capped at 21 million coins, making it resistant to inflationary debasement. In contrast, the dollar's purchasing power consistently declines through unrestrained money printing. History has shown that societies prefer money that is hard to inflate.

If recent rampant inflation is uncontainable and the dollar system falters, bitcoin is well-positioned as a successor. This global monetary A/B test is still early, but given their respective sizes, a little bitcoin can go a long way. If it succeeds, early adopters will benefit enormously compared to latecomers. Of course, there are no guarantees, but the potential reward justifies reasonable exposure despite the risks.

Let’s imagine Nervous Nancy, an extremely conservative investor. She wants to invest but also take the least risk possible. She invests 100% of her money in short-term cash equivalents (short-term treasuries, money markets, CDs, maybe some cash in the coffee can). With this investment allocation, she’s nearly certain to get her initial investment back and receive a modest amount of interest as a gain. However, she has no guarantees that the investment returned to her will purchase the same amount as it used to. Inflation and money printing cause each dollar to be able to purchase less and less over time. Depending on the severity of the inflation, it might not buy anything at all. In other words, she didn’t lose any dollars, but the dollar lost purchasing power.

Now, let’s salt her portfolio with bitcoin.

99% short-term treasuries. 1% bitcoin.

With a 1% allocation, if bitcoin goes to zero overnight, she’ll have only lost a penny on the dollar, and her treasury interest will quickly fill the gap. Not at all catastrophic to her financial future.

However, if the hypothetical hyperinflationary scenario from above plays out and bitcoin grows 100x in purchasing power, she’s saved everything. Metaphorically, her entire dollar house burned down, and “bitcoin insurance” made her whole. Powerful. A little bitcoin salt goes a long way.

(When protecting against the existing system, it’s important to remember that you need to get your bitcoin out of the system. Keeping bitcoin on an exchange or with a counterparty will do you no good if that entity fails. If you view bitcoin as insurance, it’s essential to keep your bitcoin in cold storage and hold your keys. Otherwise, it’s someone else’s insurance.)

When all you have a hammer, everything looks like a…

A construction joke:

There are only three rules to construction: 1.) Always use the right tool for the job! 2.) A hammer is always the right tool! 3.) Anything can be a hammer!

Yeah. That’s what I thought, too. Slightly funny and mostly useless.

But if you spend enough time swinging a hammer, you’ll eventually realize it can be more than it first appears. Not everything is a nail. A hammer can tear down walls, break concrete, tap objects into place, and wiggle other things out. A hammer can create and destroy; it builds tall towers and humbles novice fingers. The use cases expand with the skill of the carpenter.

Like hammers, bitcoin is a monetary tool. And a 1-5% allocator to the asset typically sees a “speculative insurance” use case - valid. Bitcoin is speculative insurance, but it is not only speculative insurance. People invest and save in bitcoin for many different reasons.

I’ve seen people use bitcoin to pursue all of the following use cases:

  • Hedging against a financial collapse (speculative insurance)
  • Saving for family and future (long-term general savings and safety net)
  • Growing a downpayment for a house (medium-term specific savings)
  • Shooting for the moon in a manner equivalent to winning the lottery (gambling)
  • Opting out of government-run, bank-controlled financial systems (financial optionality)
  • Making a quick buck (short-term trading)
  • Escaping a hostile country (wealth evacuation)
  • Locking away wealth that can’t be confiscated (wealth preservation)
  • As a means to influence opinions and gain followers (social status)
  • Fix the money and fix the world (mission and purpose)

Keep this in mind when taking other people’s financial advice. They are often playing a different game than you. They have different goals, upbringings, worldviews, family dynamics, and circumstances. Even though they might use the same hammer as you, it could be for a completely different job.

Wrapping Up

A massive allocation to bitcoin may seem crazy to some people, yet perfectly reasonable to others. The same goes for having a 1% allocation.

But, given today’s macroeconomic environment and bitcoin’s trajectory, I find very few use cases where 0% bitcoin makes sense. By not owning bitcoin, you implicitly say that you are 100% certain it will fail and go to zero. Given its 14-year history so far, I’d recommend reducing your confidence. Nobody is 100% right forever. A little salt goes a long way. Your financial plan may be riskier without bitcoin. Diversify accordingly.

“We must learn our limits. We are all something, but none of us are everything.” - Blaise Pascal.

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Shakira’s net worth

After 12 albums, a tax evasion case, and now a towering bronze idol sculpted in her image, how much is Shakira worth more than 4 decades into her care…

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6 hours ago

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March 14, 2024

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Shakira’s considerable net worth is no surprise, given her massive popularity in Latin America, the U.S., and elsewhere. 

In fact, the belly-dancing contralto queen is the second-wealthiest Latin-America-born pop singer of all time after Gloria Estefan. (Interestingly, Estefan actually helped a young Shakira translate her breakout album “Laundry Service” into English, hugely propelling her stateside success.)

Since releasing her first record at age 13, Shakira has spent decades recording albums in both Spanish and English and performing all over the world. Over the course of her 40+ year career, she helped thrust Latin pop music into the American mainstream, paving the way for the subsequent success of massively popular modern acts like Karol G and Bad Bunny.

In late 2023, a 21-foot-tall bronze sculpture of Shakira, the barefoot belly dancer of Barranquilla, was unveiled at the city's waterfront. The statue was commissioned by the city's former mayor and other leadership.

Photo by STR/AFP via Getty Images

In December 2023, a 21-foot-tall beachside bronze statue of the “Hips Don’t Lie” singer was unveiled in her Colombian hometown of Barranquilla, making her a permanent fixture in the city’s skyline and cementing her legacy as one of Latin America’s most influential entertainers.

After 12 albums, a plethora of film and television appearances, a highly publicized tax evasion case, and now a towering bronze idol sculpted in her image, how much is Shakira worth? What does her income look like? And how does she spend her money?

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How much is Shakira worth?

In late 2023, Spanish sports and lifestyle publication Marca reported Shakira’s net worth at $400 million, citing Forbes as the figure’s source (although Forbes’ profile page for Shakira does not list a net worth — and didn’t when that article was published).

Most other sources list the singer’s wealth at an estimated $300 million, and almost all of these point to Celebrity Net Worth — a popular but dubious celebrity wealth estimation site — as the source for the figure.

A $300 million net worth would make Shakira the third-richest Latina pop star after Gloria Estefan ($500 million) and Jennifer Lopez ($400 million), and the second-richest Latin-America-born pop singer after Estefan (JLo is Puerto Rican but was born in New York).

Shakira’s income: How much does she make annually?

Entertainers like Shakira don’t have predictable paychecks like ordinary salaried professionals. Instead, annual take-home earnings vary quite a bit depending on each year’s album sales, royalties, film and television appearances, streaming revenue, and other sources of income. As one might expect, Shakira’s earnings have fluctuated quite a bit over the years.

From June 2018 to June 2019, for instance, Shakira was the 10th highest-earning female musician, grossing $35 million, according to Forbes. This wasn’t her first time gracing the top 10, though — back in 2012, she also landed the #10 spot, bringing in $20 million, according to Billboard.

In 2023, Billboard listed Shakira as the 16th-highest-grossing Latin artist of all time.

Shakira performed alongside producer Bizarrap during the 2023 Latin Grammy Awards Gala in Seville.

Photo By Maria Jose Lopez/Europa Press via Getty Images

How much does Shakira make from her concerts and tours?

A large part of Shakira’s wealth comes from her world tours, during which she sometimes sells out massive stadiums and arenas full of passionate fans eager to see her dance and sing live.

According to a 2020 report by Pollstar, she sold over 2.7 million tickets across 190 shows that grossed over $189 million between 2000 and 2020. This landed her the 19th spot on a list of female musicians ranked by touring revenue during that period. In 2023, Billboard reported a more modest touring revenue figure of $108.1 million across 120 shows.

In 2003, Shakira reportedly generated over $4 million from a single show on Valentine’s Day at Foro Sol in Mexico City. 15 years later, in 2018, Shakira grossed around $76.5 million from her El Dorado World Tour, according to Touring Data.

Related: RuPaul's net worth: Everything to know about the cultural icon and force behind 'Drag Race'

How much has Shakira made from her album sales?

According to a 2023 profile in Variety, Shakira has sold over 100 million records throughout her career. “Laundry Service,” the pop icon’s fifth studio album, was her most successful, selling over 13 million copies worldwide, according to TheRichest.

Exactly how much money Shakira has taken home from her album sales is unclear, but in 2008, it was widely reported that she signed a 10-year contract with LiveNation to the tune of between $70 and $100 million to release her subsequent albums and manage her tours.

Shakira and JLo co-headlined the 2020 Super Bowl Halftime Show in Florida.

Photo by Kevin Winter/Getty Images)

How much did Shakira make from her Super Bowl and World Cup performances?

Shakira co-wrote one of her biggest hits, “Waka Waka (This Time for Africa),” after FIFA selected her to create the official anthem for the 2010 World Cup in South Africa. She performed the song, along with several of her existing fan-favorite tracks, during the event’s opening ceremonies. TheThings reported in 2023 that the song generated $1.4 million in revenue, citing Popnable for the figure.

A decade later, 2020’s Superbowl halftime show featured Shakira and Jennifer Lopez as co-headliners with guest performances by Bad Bunny and J Balvin. The 14-minute performance was widely praised as a high-energy celebration of Latin music and dance, but as is typical for Super Bowl shows, neither Shakira nor JLo was compensated beyond expenses and production costs.

The exposure value that comes with performing in the Super Bowl Halftime Show, though, is significant. It is typically the most-watched television event in the U.S. each year, and in 2020, a 30-second Super Bowl ad spot cost between $5 and $6 million.

How much did Shakira make as a coach on “The Voice?”

Shakira served as a team coach on the popular singing competition program “The Voice” during the show’s fourth and sixth seasons. On the show, celebrity musicians coach up-and-coming amateurs in a team-based competition that eventually results in a single winner. In 2012, The Hollywood Reporter wrote that Shakira’s salary as a coach on “The Voice” was $12 million.

Related: John Cena's net worth: The wrestler-turned-actor's investments, businesses, and more

How does Shakira spend her money?

Shakira doesn’t just make a lot of money — she spends it, too. Like many wealthy entertainers, she’s purchased her share of luxuries, but Barranquilla’s barefoot belly dancer is also a prolific philanthropist, having donated tens of millions to charitable causes throughout her career.

Private island

Back in 2006, she teamed up with Roger Waters of Pink Floyd fame and Spanish singer Alejandro Sanz to purchase Bonds Cay, a 550-acre island in the Bahamas, which was listed for $16 million at the time.

Along with her two partners in the purchase, Shakira planned to develop the island to feature housing, hotels, and an artists’ retreat designed to host a revolving cast of artists-in-residence. This plan didn’t come to fruition, though, and as of this article’s last update, the island was once again for sale on Vladi Private Islands.

Real estate and vehicles

Like most wealthy celebs, Shakira’s portfolio of high-end playthings also features an array of luxury properties and vehicles, including a home in Barcelona, a villa in Cyprus, a Miami mansion, and a rotating cast of Mercedes-Benz vehicles.

Philanthropy and charity

Shakira doesn’t just spend her massive wealth on herself; the “Queen of Latin Music” is also a dedicated philanthropist and regularly donates portions of her earnings to the Fundación Pies Descalzos, or “Barefoot Foundation,” a charity she founded in 1997 to “improve the education and social development of children in Colombia, which has suffered decades of conflict.” The foundation focuses on providing meals for children and building and improving educational infrastructure in Shakira’s hometown of Barranquilla as well as four other Colombian communities.

In addition to her efforts with the Fundación Pies Descalzos, Shakira has made a number of other notable donations over the years. In 2007, she diverted a whopping $40 million of her wealth to help rebuild community infrastructure in Peru and Nicaragua in the wake of a devastating 8.0 magnitude earthquake. Later, during the COVID-19 pandemic in 2020, Shakira donated a large supply of N95 masks for healthcare workers and ventilators for hospital patients to her hometown of Barranquilla.

Back in 2010, the UN honored Shakira with a medal to recognize her dedication to social justice, at which time the Director General of the International Labour Organization described her as a “true ambassador for children and young people.”

On November 20, 2023 (which was supposed to be her first day of trial), Shakira reached a deal with the prosecution that resulted in a three-year suspended sentence and around $8 million in fines.

Photo by Adria Puig/Anadolu via Getty Images

Shakira’s tax fraud scandal: How much did she pay?

In 2018, prosecutors in Spain initiated a tax evasion case against Shakira, alleging she lived primarily in Spain from 2012 to 2014 and therefore failed to pay around $14.4 million in taxes to the Spanish government. Spanish law requires anyone who is “domiciled” (i.e., living primarily) in Spain for more than half of the year to pay income taxes.

During the period in question, Shakira listed the Bahamas as her primary residence but did spend some time in Spain, as she was dating Gerard Piqué, a professional footballer and Spanish citizen. The couple’s first son, Milan, was also born in Barcelona during this period. 

Shakira maintained that she spent far fewer than 183 days per year in Spain during each of the years in question. In an interview with Elle Magazine, the pop star opined that “Spanish tax authorities saw that I was dating a Spanish citizen and started to salivate. It's clear they wanted to go after that money no matter what."

Prosecutors in the case sought a fine of almost $26 million and a possible eight-year prison stint, but in November of 2023, Shakira took a deal to close the case, accepting a fine of around $8 million and a three-year suspended sentence to avoid going to trial. In reference to her decision to take the deal, Shakira stated, "While I was determined to defend my innocence in a trial that my lawyers were confident would have ruled in my favour [had the trial proceeded], I have made the decision to finally resolve this matter with the best interest of my kids at heart who do not want to see their mom sacrifice her personal well-being in this fight."

How much did the Shakira statue in Barranquilla cost?

In late 2023, a 21-foot-tall bronze likeness of Shakira was unveiled on a waterfront promenade in Barranquilla. The city’s then-mayor, Jaime Pumarejo, commissioned Colombian sculptor Yino Márquez to create the statue of the city’s treasured pop icon, along with a sculpture of the city’s coat of arms.

According to the New York Times, the two sculptures cost the city the equivalent of around $180,000. A plaque at the statue’s base reads, “A heart that composes, hips that don’t lie, an unmatched talent, a voice that moves the masses and bare feet that march for the good of children and humanity.” 

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